According to Article 7 of the MLM Regulations on Prohibiting MLM, the following acts belong to MLM:

1) The organizer or operator, through the development of personnel, requires the developed personnel to join other personnel, and calculates and pays remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel directly or indirectly developed, so as to seek illegal benefits;

2) The organizer or operator requires the developed personnel to pay the fees through the development personnel, or pays the fees in disguised form by subscribing to commodities. , so as to obtain the qualification to join or develop other personnel to join and seek illegal interests;

3) The organizer or operator, through the development personnel, requires the developed personnel to develop other personnel to join, forming a relationship between the upper and lower levels, and calculating and paying online rewards based on the sales performance of the following lines to seek illegal benefits.

Extended data:

Article 2 The term "pyramid selling" as mentioned in these Regulations refers to the act that the organizer or business developer calculates and pays the remuneration of the developed personnel on the basis of the number of personnel directly or indirectly developed by the organizer or business developer, or requires the developed personnel to obtain the qualification to join on the condition of paying a certain fee, so as to seek illegal interests, disrupt economic order and affect social stability.

Article 3 The local people's governments at or above the county level shall strengthen their leadership in investigating pyramid schemes, and support and urge all relevant departments to perform their duties of supervision and management according to law. The local people's governments at or above the county level shall, according to the needs, establish a coordination mechanism for investigating and handling pyramid schemes, and coordinate and solve major problems in investigating and handling pyramid schemes in a timely manner.

Article 4 The administrative department for industry and commerce and the public security organ shall, in accordance with the provisions of these Regulations, investigate and deal with pyramid schemes within their respective functions and duties.

References:

Prohibit pyramid selling-government network